They can most likely already tell, but you should be honest and tell them it makes you uncomfortable.
I have several friends who live this lifestyle, and the most difficult part for them is just having friends. Most guys turn into complete dogs when they find out and most other women feel uncomfortable because of it and won't be friends with them, but I'm not really sure what the current cultural/social stigma regarding that is in China.
As MLK said we should judge others 'by the content of their character.' As a student (I'm assuming you're a university student?) it is good for you to have experiences dealing with people you wouldn't normally associate with. It makes a person more wordly and able to think on the bigger picture rather than always based on their own needs or wants. Most importantly, just be honest with them and also yourself. If it's simply too much for you to handle, maybe it's best to look for a new place.